What is the process for Alloy to approve a pledge or seizure of ownership interests?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
of first refusal provided for in subparagraph 11.F must be made by submission of our form of application for consent to transfer, which must be accompanied by the documents we request and other required information. The application must indicate whether you or an Owner proposes to retain a security interest in the property to be transferred. No security interest may be retained or created, however, without our prior written consent and except upon conditions acceptable to us. Any agreement used in connection with a transfer will be subject to our prior written approval, which approval will not be withheld unreasonably. You immediately must notify us of any proposed transfer and must submit promptly to us the application for consent to transfer and any other required documents and information. Any attempted transfer by you without our prior written consent or otherwise not in compliance with the terms of this Agreement will be void, your interest in this Agreement will be voluntarily abandoned, and it will provide us with the right to elect either to deem you in default and terminate this Agreement or to collect from you and the guarantors a transfer fee equal to two times the transfer fee provided for in subparagraph 11.C.
- C. Transfer Fee. You must pay to us a transfer fee in the amount of $10,000. The transfer fee is nonrefundable even if, for any reason, the proposed transfer does not occur.
- D. Conditions of Transfer. We condition our consent to any proposed transfer, whether to an individual, a corporation, a partnership or any other entity upon the following:
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- Assignee Requirements. The assignee must meet all of our then-current requirements for our ALLOY franchise program we are offering at the time of the proposed transfer and sign our then-current form of franchise agreement modified to reflect the term remaining under this Agreement.
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- Payment of Amounts Owed. All amounts owed by you to us, or any of our affiliates, your suppliers or any landlord for the Facility premises and Facility, or upon which we or any of our affiliates have any contingent liability must be paid in full.
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- Reports.
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Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, if a franchisee or owner proposes to retain a security interest in the property to be transferred, they must first seek Alloy's written consent, and the conditions must be acceptable to Alloy. The franchisee must notify Alloy immediately of any proposed transfer and promptly submit the application for consent to transfer, along with any other required documents and information.
Alloy conditions its consent to any proposed transfer on several factors. The assignee must meet all of Alloy's then-current requirements for its franchise program and sign Alloy's then-current form of franchise agreement, modified to reflect the remaining term. All amounts owed to Alloy, its affiliates, suppliers, or any landlord for the Facility premises and Facility, or upon which Alloy or its affiliates have any contingent liability, must be paid in full. The franchisee must also have provided all required reports to Alloy and complied with modernization provisions.
Any transfer attempted without Alloy's prior written consent or not complying with the agreement's terms will be considered void. In such cases, the franchisee's interest in the agreement will be voluntarily abandoned. Alloy then has the right to either deem the franchisee in default and terminate the agreement or collect a transfer fee equal to two times the standard transfer fee, which is normally $10,000. This means the transfer fee could be $20,000 if the franchisee fails to obtain proper consent.